MACRO ECONOMIC REVIEW
Infrastructure sector is a key driver for the Indian economy. The sector is highly
responsible for propelling Indias overall development and enjoys intense focus from
Government for initiating policies that would ensure time-bound creation of world class
infrastructure in the country. Infrastructure sector includes power, bridges, dams, roads
and urban infrastructure development. In order to boost the construction of buildings in
the country, the Government of India has decided to come up with a single window clearance
facility to accord speedy approval of construction projects.
Being one of the most resilient sectors, it plays a crucial role in accelerating
Indias overall development, thereby driving its economic growth. India has to enhance its
infrastructure to reach its 2025 economic growth target of US$ 5 trillion. Increased
government spending on more extensive scale projects o ers strength to Indias
competitiveness across the globe. Infrastructure is a key enabler in helping India become
a US$ 26 trillion economy.
Investments
Investment in building and upgrading physical infrastructure, especially in synergy
with the ease of doing business initiatives, remain pivotal to increase e ciency and
costs.
India is witnessing signi cant interest from international investors in the
infrastructure space. Emphasizing the importance of investment for creating modern
infrastructure, seven engines of growth have been identi ed roads, railways, ports,
airports, mass transport, waterways and logistics infrastructure, Indian government has
given the much-needed push to the infrastructure sector. As per the Department for
Promotion of Industry and Internal Trade (DPIIT), FDIs in the construction development and
construction sector stood at US$ 26.17 billion and US$ 26.30 billion, respectively,
between the period of April 2000 and December 2021. The logistics sector in India is
rising at a CAGR of 10.5% annually which shows that both in terms of investments and
revenue the infra game is going strong.
Govt. Initiatives for the Sector
India is looking at a US$ 5 trillion economy dream. Union Budget 2023 re ects
continuing strong commitment of the Government to boost economic growth by investing in
infrastructure development leading to an increase in capital expenditure by 37.4 per cent
over RE 2022-23. Announcements in Union Budget 2023-24:
The governments focus on building infrastructure of the future has been evident given
the slew of initiatives launched recently. The US$ 1.3 trillion national master plan for
infrastructure, Gati Shakti, which is a 100 lakh-crore project has been a forerunner to
bring about systemic and e ective reforms in the sector, and has already shown a signi
cant headway.
Capital investment outlay for infrastructure is being increased by 33% to 10 lakh
crore (US$ 122 billion), which would be 3.3% of GDP and almost three times the outlay in
2019-20.
Budget complemented with continuation of the 50-year interest free loan to state
governments for one more year to spur investment in infrastructure and to incentivize them
for complementary policy actions, with a signi cantly enhanced outlay of 1.3 lakh crore
(US$ 16 billion).
Infrastructure Finance Secretariat is being established to enhance opportunities for
private investment in infrastructure that will assist all stakeholders for more private
investment in infrastructure, including railways, roads, urban infrastructure, and power.
In June 2022, Minister of Road Transport and Highways, opened 15 national highway
projects worth 13,585 crore (US$1.7 billion). a) OPPORTUNITIES AND STRENGTHS
The Company has a well diversi ed business portfolio spread across various business
verticals viz., Buildings & Housing, Roads, Water & Environment, Irrigation, Power
and Railways. The Company has signi cant experience in construction sector and is
recognized as one of the key construction players in the country. It has carried out
variety of projects across the country. Our core strength is our people who carry several
years of industry experience in various domains including engineering, design,
construction, procurement, planning, etc.
b) FINANCIAL PERFORMANCE
During the year under review, there is no change in capital of the Company. We are glad
to inform that real estate project i.e. Steel Strips Highway Towers has received good
response from the home buyers. Encouraged by the interest shown by buyers in this housing
project, your Company has made changes in the layout plan of Phase-2 of this project,
which will bring in substantial additional saleable area which will result in improved
revenues in the current & future years as compared to last year.
Moreover, Company owns big chunks of land at prime locations in the State of Punjab and
Haryana and intends to use these for following projects: -
Company owns prime piece of land comprising 44 Kille (appox 36 acres) at Village
Sarsini near Lalru (Punjab) on Chandigarh-Ambala Highway and intends to develop this land
into Mix Use Land Project comprising industrial plots alongwith the residential complex
for the users. Company owns another 16 acres of land in Distt Sangrur (Punjab) on State
Highway and 11 acres of land at Amloh in Distt. Fatehgarh Sahib (Punjab). Both these lands
are situated close to industrial zones and Company intends to develop these lands to be
sold as industrial plots of di erent sizes.
Company also owns premium piece of land at Sohna, Gurgaon (Haryana). Gurgaon is also
known as nancial and technology hub and is home to many of Indias and Fortune 500
companies and is one of the most promising real estate market which has huge demand for
Luxury, Ultra Luxury Housing and Farm Houses. Company plans to enter this lucrative market
in near future and develop this land for upscale farm houses. This will signi cantly
increase the Companys topline & bottomline in the coming years.
OPERATIONAL PERFORMANCE
During the year under review, the total revenue were to the tune of 1327.54 lakh as
against 243.27 lakh during the previous year. The Company earned a pro t of 909.13 lakh
before interest & depreciation as against a loss of 30.88 lakh in the previous year.
The net pro t after tax are to the tune of 868.86 lakh as compared to net loss of 287.89
lakh in the previous year on account of increase in other income from pro t on sale of
Agricultural Land etc.
The Company has e ective and robust system of internal controls to help management
review the e ectiveness of the nancial and operating controls and assurance about
adherence to companys laid down systems and procedures. Proper controls are in place,
which are reviewed at regular intervals to ensure that transactions are properly
authorized & correctly reported and assets are safeguarded. The Audit Committee
periodically reviews the ndings and recommendations of the Auditors and takes necessary
corrective actions as deemed necessary.
RISKS AND CONCERNS
The Company has a robust Enterprise Risk Management process in place, which is a
holistic, integrated and structured approach to manage risks with the objective of
maximizing shareholders value.
The risk management process broadly consists of identi cation, assessment, mitigation,
prioritization and monitoring of risks. The ERM process allows the company to:
Enhance con dence in achieving its desired goals and objectives
E ectively restrain threats to acceptable levels
Take informed decisions about exploiting opportunities
Owing to the nature of the industry the Company operates in, it is exposed to a variety
of risk factors which are broadly categorized into technical, physical, construction,
performance and legal risks.
A tight risk process is carried out from initial stage to project completion stage to
manage, mitigate and monitor these risks by adopting speci c risk mitigation measures.
During the year, the Board has reviewed the process and the Risks that have been identi ed
for the business. Some of these key risks that the Company faces along with their
mitigation strategies adopted are listed below:
| Risk Type |
Key Risks |
Risk Impact |
Risk Mitigation Strategy |
|
Incomplete |
High |
Carrying out extensive due diligence during the project initial phase |
|
Design |
|
Bidding for those works which are closely aligned with our core strengths |
|
Inadequate Speci cations |
High |
Carrying out exhaustive due diligence before and during the bid phase |
|
|
|
Incorporating contingency for inadequate speci cations in the price bids |
| Technical |
|
|
Engaging with clients and their representatives on a regular basis |
| Risks |
Insu cient Resources of |
Medium |
Strong and e cient resources planning, both at the corporate and project levels. |
|
Construction |
|
Strong management of vendors and subcontractors |
|
Materials |
|
Carrying out due diligence on vendors and sub-contractors before entering into
agreements with them |
|
Equipment Damage/ Failure |
Medium |
Own a sizeable equipment base, speci cally those, which are frequently used in our
operations thus reducing dependence on equipment vendors |
|
|
|
Following a strict preventive and corrective maintenance schedule |
|
|
|
Strong relationship with equipment vendors for renting equipment |
| Physical |
|
|
Strong management of equipment vendors including rating their performance |
| Risks |
Labor Injuries |
Low |
Strong implementation and monitoring of health and safety protocols to prevent
injuries |
|
|
|
Designated safety personnel at sites. |
|
|
|
Periodical reporting on safety and health issues |
|
|
|
Conducting training programs on health and safety issues |
|
Labour Productivity |
Medium |
Ensure safe, clean and hygienic work environment at all work locations. |
|
|
|
Strong track record in maintaining labour. |
| Construction Risks |
|
|
Regular monitoring and ensuring strong controls to ensure adherence to timelines and
quality |
|
Theft |
Low |
Strong monitoring and control to prevent theft |
|
|
|
Penalizing defaulters without exception |
|
Achieving Required Quality |
Medium |
Regular inspection of works and reporting to clients |
|
|
|
Strong adherence to speci cations and timelines |
|
|
|
Constant engagement with clients and their representatives |
| Performance |
|
|
Reliable Quality assurance programs |
| Risks |
Meeting Client Expectations |
Medium |
Experienced workforce, Regular engagement with clients |
|
|
|
Response mechanisms to address issues raised by clients and their representatives |
|
Claims, Disputes & Litigations |
Medium |
Engagement with clients to capture and address litigious issues upfront |
| Legal Risks |
|
|
Proper and thorough documentation on each project from the pre bid stage |
|
|
|
In-house Contracts and Claims team. |
|
|
|
Legal rm onboard to handle pre-legal claims and/or litigations |
|
|
|
Keeping ourselves abreast on regulatory issues |
Cautionary Statement:
Statements in this report on Management Discussion and Analysis describing the
Companys Objectives, projections, estimates, expectations or predictions may be
“forward looking” within the meaning of applicable Securities laws and
regulations. Actual results could di er materially from those expressed or implied.
|
For and on behalf of Board of Directors |
|
RAJINDER KUMAR GARG |
| Place: Chandigarh |
Chairman |
| Date: 30.05.2023 |
DIN: 00034827 |
+91-9892691696
